Legal fees blamed for rising motor premiums

Legal fees blamed for rising motor premiums

Drivers are paying over the odds on their car insurance because of a rising number of “unnecessary” personal injury claims and associated legal fees, the Association of British Insurers (ABI) said this week.

The insurance industry body said soaring injury claims and associated legal fees have become a major issue for motor insurers, and are one of the key factors behind the rising cost of insurance cover.

Claims costs have seen a “steady increase” over the past 2 years, rising from £8.8 billion in 2006 to £9.6 billion in 2008 - an increase of 9%.

For every £1 paid out in personal injury claims, insurers are paying up to 40p in legal costs, the ABI said.

“We believe that the vast majority of non-contentious personal injury claims can be settled just as quickly without the need for lawyers to be involved without any reduction in compensation for the customer,” said Malcolm Tarling, ABI spokesperson.

The AA recently revealed that the motor insurance premiums have increased 3.5% in the last 3 months, and 11% in the last year.

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